Merck: Investing in Science-Based Business (Abridged) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Merck: Investing in Science-Based Business (Abridged)
Ray Gilmartin faces a dilemma. His company's credibility has been damaged by the recent withdrawal of Vioxx, a multi-billion dollar drug. Moreover, the withdrawal of Vioxx would imply that Merck would fail to meet analysts' earnings expectations for 2005 unless Gilmartin cuts the R&D budget. Cutting the budget might hurt morale and productivity in Merck labs.
Swot Analysis of "Merck: Investing in Science-Based Business (Abridged)" written by Ananth Raman, Inga Maurer includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Merck Gilmartin facing as an external strategic factors. Some of the topics covered in Merck: Investing in Science-Based Business (Abridged) case study are - Strategic Management Strategies, Operations management, Research & development and Technology & Operations.
Some of the macro environment factors that can be used to understand the Merck: Investing in Science-Based Business (Abridged) casestudy better are - – wage bills are increasing, technology disruption, supply chains are disrupted by pandemic , increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google,
talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Merck: Investing in Science-Based Business (Abridged)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Merck: Investing in Science-Based Business (Abridged) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Merck Gilmartin, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Merck Gilmartin operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Merck: Investing in Science-Based Business (Abridged) can be done for the following purposes –
1. Strategic planning using facts provided in Merck: Investing in Science-Based Business (Abridged) case study
2. Improving business portfolio management of Merck Gilmartin
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Merck Gilmartin
Strengths Merck: Investing in Science-Based Business (Abridged) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Merck Gilmartin in Merck: Investing in Science-Based Business (Abridged) Harvard Business Review case study are -
Sustainable margins compare to other players in Technology & Operations industry
– Merck: Investing in Science-Based Business (Abridged) firm has clearly differentiated products in the market place. This has enabled Merck Gilmartin to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Merck Gilmartin to invest into research and development (R&D) and innovation.
Ability to lead change in Technology & Operations field
– Merck Gilmartin is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Merck Gilmartin in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Merck Gilmartin is present in almost all the verticals within the industry. This has provided firm in Merck: Investing in Science-Based Business (Abridged) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Merck Gilmartin digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Merck Gilmartin has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Learning organization
- Merck Gilmartin is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Merck Gilmartin is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Merck: Investing in Science-Based Business (Abridged) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Merck Gilmartin has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Merck Gilmartin has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Training and development
– Merck Gilmartin has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Merck: Investing in Science-Based Business (Abridged) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Innovation driven organization
– Merck Gilmartin is one of the most innovative firm in sector. Manager in Merck: Investing in Science-Based Business (Abridged) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Merck Gilmartin has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Merck Gilmartin to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Merck Gilmartin has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Merck: Investing in Science-Based Business (Abridged) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Merck Gilmartin in the sector have low bargaining power. Merck: Investing in Science-Based Business (Abridged) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Merck Gilmartin to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Merck Gilmartin
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Merck Gilmartin does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Merck: Investing in Science-Based Business (Abridged) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Merck: Investing in Science-Based Business (Abridged) are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Merck: Investing in Science-Based Business (Abridged), it seems that the employees of Merck Gilmartin don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Merck: Investing in Science-Based Business (Abridged) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Merck Gilmartin has relatively successful track record of launching new products.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Merck Gilmartin supply chain. Even after few cautionary changes mentioned in the HBR case study - Merck: Investing in Science-Based Business (Abridged), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Merck Gilmartin vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Merck Gilmartin, firm in the HBR case study Merck: Investing in Science-Based Business (Abridged) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Merck Gilmartin needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Lack of clear differentiation of Merck Gilmartin products
– To increase the profitability and margins on the products, Merck Gilmartin needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Merck: Investing in Science-Based Business (Abridged), is just above the industry average. Merck Gilmartin needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Merck: Investing in Science-Based Business (Abridged), in the dynamic environment Merck Gilmartin has struggled to respond to the nimble upstart competition. Merck Gilmartin has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Merck Gilmartin has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Merck Gilmartin has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High operating costs
– Compare to the competitors, firm in the HBR case study Merck: Investing in Science-Based Business (Abridged) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Merck Gilmartin 's lucrative customers.
Opportunities Merck: Investing in Science-Based Business (Abridged) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Merck: Investing in Science-Based Business (Abridged) are -
Using analytics as competitive advantage
– Merck Gilmartin has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Merck: Investing in Science-Based Business (Abridged) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Merck Gilmartin to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Merck Gilmartin to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Leveraging digital technologies
– Merck Gilmartin can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Merck Gilmartin can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Merck: Investing in Science-Based Business (Abridged), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Merck Gilmartin can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Merck Gilmartin is facing challenges because of the dominance of functional experts in the organization. Merck: Investing in Science-Based Business (Abridged) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Building a culture of innovation
– managers at Merck Gilmartin can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Technology & Operations segment.
Buying journey improvements
– Merck Gilmartin can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Merck: Investing in Science-Based Business (Abridged) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Merck Gilmartin can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Merck Gilmartin to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Merck Gilmartin to hire the very best people irrespective of their geographical location.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Merck Gilmartin in the consumer business. Now Merck Gilmartin can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Merck Gilmartin has opened avenues for new revenue streams for the organization in the industry. This can help Merck Gilmartin to build a more holistic ecosystem as suggested in the Merck: Investing in Science-Based Business (Abridged) case study. Merck Gilmartin can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Merck Gilmartin can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Threats Merck: Investing in Science-Based Business (Abridged) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Merck: Investing in Science-Based Business (Abridged) are -
Environmental challenges
– Merck Gilmartin needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Merck Gilmartin can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Merck Gilmartin needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Merck Gilmartin can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Merck: Investing in Science-Based Business (Abridged) .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Merck Gilmartin business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Merck Gilmartin is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Merck Gilmartin with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Merck Gilmartin
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Merck Gilmartin.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Regulatory challenges
– Merck Gilmartin needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Technology & Operations industry regulations.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Merck Gilmartin can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Merck Gilmartin in the Technology & Operations sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Merck: Investing in Science-Based Business (Abridged), Merck Gilmartin may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Weighted SWOT Analysis of Merck: Investing in Science-Based Business (Abridged) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Merck: Investing in Science-Based Business (Abridged) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Merck: Investing in Science-Based Business (Abridged) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Merck: Investing in Science-Based Business (Abridged) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Merck: Investing in Science-Based Business (Abridged) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Merck Gilmartin needs to make to build a sustainable competitive advantage.